Canadian Money Forum banner
1 - 14 of 14 Posts

·
Registered
Joined
·
56 Posts
Discussion Starter · #1 ·
Nice to see some investors are benefitting from rising interest rates.

Enbridge Inc. announced that the annual dividend rate for the Series D shares (ENB.PR.D) will be increased from 4.00% to 4.46% on March 1, 2018. The shares will pay this new dividend rate from March 1, 2018 to March 1, 2023.
 

·
Registered
Joined
·
3,817 Posts
...am i wrong, or does the pref shares category seem to be gaining popularity lately...?
You'd have to be more specific regarding the category, since each reacts different to interest rate changes and conditions. Is it Floating Rate, Fixed Floaters, low spread Rate Resets, high spread Rate Resets, Fixed Straight Perpetual, Retractable, Split-Share?

ltr
 

·
Registered
Joined
·
236 Posts
...am i wrong, or does the pref shares category seem to be gaining popularity lately...?
i saw that too.
I figured it was because of 3 rate hikes by the central bank of Canada.
rate resets should benefit.
fixed rate shares issued between 2015 and 2017 should suffer.
but fixed rate shares issued before 2015 should stay around same yield.

I dont know about all those other types mentioned in above post
 

·
Registered
Joined
·
1,875 Posts
Nice to see some investors are benefitting from rising interest rates.

Enbridge Inc. announced that the annual dividend rate for the Series D shares (ENB.PR.D) will be increased from 4.00% to 4.46% on March 1, 2018. The shares will pay this new dividend rate from March 1, 2018 to March 1, 2023.
Yes, because prospectus offering states reset BOC 5yr (now~2.09%) + 2.37% = ~ 4.46%

Not sure many will opt for the conversions to series E with the rates/resets stated.
 

·
Registered
Joined
·
410 Posts
...am i wrong, or does the pref shares category seem to be gaining popularity lately...?
Maybe the rate-reset type of preferred shares which are gaining in this environment.

For what it's worth I've held ZPR (rate resets) for a little over a year now and it's been a really good complement to the bonds in the fixed income part of the portfolio. Total return is 19% for me.

Just checked and Enbridge In Sr D 4.00 Pfd is 1.18% of the holdings.
 

·
Registered
Joined
·
4,416 Posts
ZPR - an ETF that aims to match a Laddered Canadian Preferred Share Index has been going up in price. Maybe overbought now at C$11.94? Yield only 3.84%. I was looking at a way to buy into the preferred market, but hesitated to buy more of ZPR at this level.

Any other suggestions? Maybe a few individual rate resets or another fund?
 

·
Registered
Joined
·
410 Posts
ZPR - an ETF that aims to match a Laddered Canadian Preferred Share Index has been going up in price. Maybe overbought now at C$11.94? Yield only 3.84%. I was looking at a way to buy into the preferred market, but hesitated to buy more of ZPR at this level.

Any other suggestions? Maybe a few individual rate resets or another fund?
Last ZPR distribution I received was $0.041 per unit or $0.492 on an annualized basis.
This gives 4.12% at current cost of $11.94
 

·
Registered
Joined
·
37 Posts
Actually the January 2018 distribution is dropping to $0.038 per share, which is kind of surprising, I was expecting it to increase. I expect the distribution and yield to creep up over the next few years with the rate increases we’ve had. Looking back to 2014, the price was around $14, distribution for the year was $0.6040 for the year or just over 0.05 per month. So the yield was around 4.3% in 2014.

The 5 year Canada bond yield started at around 1.6% at the beginning of 2014 and it crashed down to 0.6% the beginning of 2015. So as long as the 5 year Canada bond Yield stays at the current levels around 2%, then the yield on ZPR should move up. Hopefully the price of ZPR moves back up to $14 in the next couple of years.
 

·
Registered
Joined
·
1,497 Posts
The shares for ENB.PR.D are selling at $20.85 now on the market. If the new dividend is going to be $1.115, the yield will actually be 5.3% if you can get a hold of any of the os shares. New shares will have a yield of 4.46% if issued at par. ($1.115/25)

This is why HPR is a good PS ETF as it is actively managed. They have this issue as a holding now.
 

·
Registered
Joined
·
410 Posts
Actually the January 2018 distribution is dropping to $0.038 per share, which is kind of surprising, I was expecting it to increase. I expect the distribution and yield to creep up over the next few years with the rate increases we’ve had. Looking back to 2014, the price was around $14, distribution for the year was $0.6040 for the year or just over 0.05 per month. So the yield was around 4.3% in 2014.

The 5 year Canada bond yield started at around 1.6% at the beginning of 2014 and it crashed down to 0.6% the beginning of 2015. So as long as the 5 year Canada bond Yield stays at the current levels around 2%, then the yield on ZPR should move up. Hopefully the price of ZPR moves back up to $14 in the next couple of years.
Indeed the upcoming January distribution shows 0.038, same as November 2017. The one from December was 0.041 but that must have something a little extra. Oh well.
 

·
Registered
Joined
·
4,416 Posts
Last ZPR distribution I received was $0.041 per unit or $0.492 on an annualized basis.
This gives 4.12% at current cost of $11.94
You better let BMO know :) - They say it is 3.82% (or 3.85% today). And so do all the on-line sites I have looked at. Presumably distributions depend on just which preferreds they hold at the time.
 
1 - 14 of 14 Posts
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.
Top